What Taxes Need To Be Paid When You Move To The UK?

Employment Income

Employment performed wholly or partly in the UK is liable to UK tax.

For many employees, they are seconded from overseas and remain on the payroll in their home country. Although you may be paying taxes in that country, you are still taxed in the UK on any work you perform in the UK.

To stop double taxation, you may be able to claim the UK tax against the foreign tax on your employment performed in the UK.

See below for using the double taxation agreement for employments in the UK lasting less than 183 where you are employed by a non UK resident employer.

Overseas Workdays

If you move to the UK and are UK tax resident, for the first 3 tax years any days you spend working outside the UK can be excluded from UK tax.

To qualify for overseas workdays relief:

You are not domiciled in the UK for that year (domicile is your long-term tax home)
You claim the remittance basis
You are paid outside the UK for any work performed outside the UK and those funds are not transferred to the UK

Claiming Travel, Accommodation and Subsistence

If you have been seconded to the UK, where the plan is for the duration to not exceed 24 months, you can claim:

The cost of traveling to work during the secondment
Accommodation for the duration of the secondment
Additional subsistence costs attributable to the secondment

The expenses will be claimed in your UK tax return, this is known as Detached Duty Relief.

Self-Employed Income

If you are UK tax resident, you are taxed in the UK on all self-employed income whether this is performed in the UK or abroad.

If you can claim the remittance basis, any income from self-employed work performed outside the UK will be taxed in the UK only if the income is remitted (transferred) back to the UK.

Even if you are paid outside of the UK, if you perform the work in the UK then you are liable to tax in the UK on that work.

Using The Double Taxation Agreements

Employed income - for employees working in the UK who are not UK resident and they work for an employer who is non-resident in the UK, they may be able to use the double tax treaty to exempt the income from liability to UK tax.

Self-employed income - there are specific clauses in double tax treaties to provide relief against UK tax for non UK resident entertainers, such as a theatre, motion picture, radio, or television artist, or a musician, or as a sportsman, from their personal activities performed in the UK.

Remittance Basis

If you move to the UK and your permanent tax home (domicile) is outside the UK, you may not have to pay UK tax on your foreign income for the first 7 tax years.

Claiming the remittance basis means you only pay tax on the foreign income or gains that you transfer to the UK.

You can claim foreign tax credits against the UK tax due on the same foreign income.

The downside is that by claiming the remittance basis you will lose your tax free allowances (personal allowances) for income tax and capital gains tax.

If your foreign income and gains are less that £2,000 there is no UK tax while your domicile remains outside the UK and you don't transfer those funds to the UK. This relief is available even after the 7 year period mentioned above.

After 7 years you can still exclude all your foreign income and gains (if these are more than £2,000) by paying the annual remittance basis charge. This is £30,000 per year for years 8, 9, 10 and 11. Then the annual charge increases to £60,000 from year 12. See domicile section below for when you go into year 16.

Domicile (permanent tax home)

In April 2017, the government decided to introduce rules to override common law and treat you as domiciled in the UK for tax purposes if you meet condition A or B below.

Condition A

To meet this condition you must:

be born in the UK
have the UK as your domicile of origin
be resident in the UK for 2017 to 2018, or later years

Condition B

Condition B is met when you’ve been UK resident for at least 15 of the 20 tax years before the current tax year.

Other Income

If you have any other UK source income, that will need to be taxed in the UK, normally through a UK self-assessment tax return.

Including:

Property income and expenses
Investment income (interest, dividends and capital gains - even if these are automatically reinvested)
Trust income

ISA income is excluded from UK tax, but may need to be reported if you are tax resident in another country.

For all foreign income, unless you are claiming the remittance basis (or your domicile is outside the UK and the foreign income is less than £2,000 and is not transferred to the UK), you will need to declare worldwide income in the UK.

If you do have foreign taxable income, you can claim the foreign tax against UK tax on the same income.

But, any work performed in the UK will be UK source income, even if you are paid overseas for that work (there are some exceptions for this potentially under the double taxation agreements discussed above).

ANY QUESTIONS

We are very happy to help with any tax questions on moving to the UK and we can run through how to file your UK self-assessment tax return.

Our friendly team of qualified tax advisers and accountants have specialised tax preparation experience to help international clients, non domiciled and dual resident individuals in London, across the UK and will walk you through what the next steps are – contact us today.

Actors' Taxes Guide for the UK

GET ACTORS INCOME SPREADSHEET

GET ACTORS EXPENSES SPREADSHEET

As an actor, taxes may be the last thing you want to deal with – just leave it alone and it will all go away!

As the tax deadline gets closer, it can become a source of stress and there’s always a lot to think about with tax (there are literally tens of thousands of pages of tax law) – below we’ve made it simple and you have a good place to start your return.

First year for actors

If this is the start of your acting career, or you have come back from a break, the first thing to do is register as self employed with HMRC so you can file the self assessment tax return.

You can register with HMRC here.

After you register for self assessment, HMRC will email or write to you throughout the tax year to remind you of the tax filing deadline.

Income for actors

Especially when you start out, you may have a mix of work as you look to become established in the acting industry.

When you are living in the UK, you will need to report your worldwide income on the UK tax return.

That includes:

Employed work - if you have any roles where you are treated as an employee, possibly where you are contracted for a production, or you have a side job with your acting (such as teaching), you will receive pay slips and a P60 at the end of the tax year, or a P45 if you left before 31 March 2020. The employer should deduct tax from each pay slip and you will include both the income and tax deducted (PAYE) on your tax return
Self employed income - you will normally send invoices for all your self employed work, or you may have an agent who will invoice on your behalf and provide you with statements. When you complete the self employed pages of the tax return, you show the income before any deductions (e.g. agent's commission) - the deductions may be allowable as a tax expense
Partnership income - if you set up as a group and invoice collectively, you will be a partnership for tax purposes. You will need to register the partnership with HMRC and file a separate partnership tax return each year. The profits (or losses) will then be split amongst the partners and they will pay tax themselves on their personal tax returns
Investment income - all bank interest, dividends, share sales and other capital gains will need to be disclosed on the tax return
Individual Savings Accounts (ISAs) - any interest, dividends and capital gains from ISAs are tax free in the UK and do not need to be disclosed on the UK return
Property income - if you rent out a property, or a room in your house or flat, you will need to show the income and expenses on your tax return. If you sell a property, that will also need to be disclosed, there are tax reliefs for selling your home
Foreign income - if you receive foreign while you are living in the UK, you will need to report that income on the UK tax return. Even if you have already paid tax overseas, you still report the income and then you can claim the foreign tax as a credit against the UK tax
Pension income - the state pension and private pensions are both taxable in the UK. The state pension does not have tax withheld when you receive it, but the private pension may have - you report all pensions on your tax return with any tax already withheld

Expenses for actors

Actors are in the lucky position that you can claim for many expenses that most people can’t.

You just always need to make sure that the expenses are reasonable and directly related to your work and that they are “wholly and exclusively” for the purposes of your business.

Having said that, what’s reasonable, ordinary and necessary will often depend on your income and what level you’re at. If you’re famous, you may need to pay extra for privacy which may be seen as extravagant, but in reality, is necessary for you to work.

Agent commision and manager fees – all the fees you pay to your agent and manager are allowable

Hair and make-up – when you incur the cost for a specific job or audition, required to maintain your appearance

Wardrobe – the general rule is that it’s clothing purely for the role and there will be no personal use. Clothing expenses for a role in a film, stage or TV performance is allowable. The clothes are not part of ‘an everyday wardrobe’; they are a ‘costume’ used in a performance

Cosmetic and medical expenses - if, as a performer, you are able to show that expenses for cosmetic surgery have been incurred solely for professional purposes, then the expenses may be allowed for tax. It would be useful in this scenario if you had as much evidence as possible to show that the expenses were for your business - having letters and emails from agents, casting directors to explain why the procedures were required and that without them you would be losing work

Travel – you are allowed to claim all costs of overnight travel (flights, Uber, trains, buses/coaches, hotels, Airbnb, tips, dry-cleaning and laundry). For local travel, you can include trips to casting, auditions, performances, acting classes and other direct business appointments. If you do have a role and need to travel on a regular basis, HMRC will only allow this if it is temporary - if you travel to the same venue for no more than 24 months

Meals – for overnight trips, you are fine to claim for meals (subsistence). You can also claim if you need to travel for business matters and it is not a place you visit on a regular basis - somewhere that you visit once or on an occasional basis. If you are on the road, HMRC does have a per diem allowance that can be useful if you are not great at keeping receipts/records

Vehicle expenses – you can either claim for mileage, where you keep a record of the distances for work, or you can claim actual costs of using the vehicle and you will need to have records of the cost of the vehicle, gas, repairs and insurance. For mileage, for the first 10,000 miles, you can claim 45p per mile for cars, 24p for motor cycles and 20p for bicycles

Research – actors need to keep up with the industry and you can claim for film and play tickets, Netflix, HBO, Apple TV and other streaming services

Subscriptions – union dues (e.g. if you are a member of Equity), magazines, journals, online sites such as Backstage and Spotlight

Legal and professional fees – lawyers, accountants and other professionals

Equipment – this covers any physical item that has a life of more than one year, normally a laptop, iPad, phone, video and sound equipment

Phone and internet costs - for your phone, either 100% if you have a dedicated phone, or a proportion if you just have one you use as a mix for business and personal calls

Marketing - headshots and showreels

Use of home – the main rule is that you must have a room (or rooms) that you use exclusively to work from home. You can claim mortgage interest, rent, gas, water, electricity, council taxes, insurance and repairs. To calculate the percentage of those costs to claim, you look at the square foot of the work area and compare that to the total square foot of the property.

Payments on account for ACTOR taxes

If the tax on your self-employed income is more than £1,000, HMRC will ask you to make payments on account for the next tax year.

These 2 payments are each 50% of the tax due for the year before.

So, for 2019/20 if your tax is more than £1,000 on your final tax return, that tax will be due on the 31 January 2021 - you will also need to make the payments below:

50% of the final tax for 2019/20 in advance for 2020/21 on 31 January 2021
50% of the final tax for 2019/20 in advance for 2020/21 on 31 July 2021

The problem for many people is the first year for paying payments on account. If you leave filing the 2019/20 tax return close to the deadline, for cashflow this could be an issue as you will need to pay for 2019/20 but then also 50% for the next tax year at the same time.

UK tax year and important dates

The last UK tax year ran from 6 April 2019 to 5 April 2020 - with the online tax return and any final taxes due by 31 January 2021.

If you do need to make payments on account for 2019/20, the dates for payment:

50% on 31 January 2020
50% on 31 July 2020

You do have the option to file a paper tax return and post this to HMRC - there is an earlier deadline of 31 October 2020.

Any questions

We are very happy to help with any actor tax questions and we can run through how to file your actor tax return.

Our friendly team of qualified tax advisers and actor accountants have specialised actor tax preparation experience to help actors and other entertainment industry professionals in London across the UK and walk you through what the next steps are – contact us today.

Additional Tax Reporting For US Expats

As a US citizen you still need to file a US tax return each year while you are living outside the United States.

In addition, you are also required to file a separate report with your foreign financial accounts and bank accounts (FBAR).

It does not stop there for many US expats and there are additional forms that need to be filed each year depending on your circumstances.

1 - Form 8938 - Reporting foreign financial assets

Although you report any bank accounts, investment accounts (including ISAs), pensions and any other foreign financial accounts on the separate FBAR, you may also need to report those as part of your US expat tax return.

Step 1 - seeing which assets need to be reported

The IRS is looking for all assets that you have an interest in to be reported.

You have an interest in a specified foreign financial asset if any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are or would be required to be reported, included, or otherwise reflected on your income tax return.

Step 2 - reporting thresholds for filing form 8938

The reporting thresholds for the foreign financial assets you have an interest in are:

Single - more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.

Married filing jointly - more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

Married filing separately - more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - there is a flat rate penalty of $10,000 for filing late or not filing per year, additional penalties of $10,000 per month start after 90 days, up to an additional maximum penalty of $50,000.

2 - Form 5471 - US Citizens Reporting Interests In Foreign Companies

If you held 10% or more shares in a company outside of the US, at any time during the year, you may need to report that company back to the US each year using form 5471.

If you were a director, or officer, of a company outside of the US - even if you held no shares, or your shares were under the 10% threshold - you may also be required to file form 5471.

If you meet the 10% threshold and then acquire additional shares or dispose of any shares then you may need to report those transactions on form 5471.

There are different levels of reporting on form 5471 depending on your level of involvement with the company.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - there is a flat rate penalty of $10,000 for filing late or not filing per company per year, additional penalties of $10,000 per month start after 90 days, up to an additional maximum penalty of $50,000.

3 - Form 8865 - US Citizens Reporting Interests In Foreign Partnerships

If you had 10% or more interest in a partnership outside of the US, at any time during the year, you may need to report that partnership back to the US each year and file form 8865.

There are different levels of reporting on form 8865 depending on your level of involvement with the partnership.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - there is a flat rate penalty of $10,000 for filing late or not filing per partnership per year, additional penalties of $10,000 per month start after 90 days, up to an additional maximum penalty of $50,000.

4 - Form 8621 - US Citizens who have investments outside the US in funds (including ISAs)

Form 8621 is commonly known as PFIC reporting - passive foreign investment companies.

Step 1 - is the investment a PFIC?

The IRS has two tests:

Income test - 75% or more of the income from the investment company is passive income (for investments this includes interest, dividends and capital gains)
Asset test - 50% or more of the assets held by the company are held to produce passive income

If you invest in a fund and it meets the two tests above, for each fund you will need to complete form 8621.

ISAs (individual savings accounts) are tax free in the UK, but they are taxable in the US. Individual stocks and shares in an ISA do not have PFIC reporting, but ISAs commonly contain funds (groups of shares) and these are liable to PFIC reporting.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - there is no penalty specifically for the form, but failing to file does allow the IRS to leave open the statute of limitations for the whole tax return indefinitely.

5 - Form 8833 - Claiming the US UK tax treaty

You may want to use the US UK tax treaty to stop double taxation, or another common reason is if you have IRAs and social security from the US while living in the UK.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - if you claim tax treaty benefits, relying on a treaty based return position, and don't file form 8833, you are subject to a penalty of $1,000 for each failure.

6 - Form 8960 - Additional tax on investment income

If you have passive income - interest, dividends, capital gains, property income - you may need to complete form 8960.

The thresholds for form 8960 are below - these are your modified adjusted gross income (not just your investment income):

Single — $200,000
Married filing jointly — $250,000
Married filing separately — $125,000

If your total income exceeds the threshold, the investment income above the threshold is liable to Net Investment Income Tax (NIIT) at 3.8%.

The form is filed with the main tax return, filed by the due date for that return (normally June 15 each year if you are a US expat - extended to July 15 for 2020).

Penalties - there is no penalty specifically for the form, but failing to file does allow the IRS to leave open the statute of limitations for the whole tax return indefinitely.

SUMMARY

Hopefully this guide will help as you check what forms you need to include in your US tax return. The IRS also has a comprehensive guide for US citizens abroad - publication 54.

We are very happy to help with any questions and we can run through how to file your US expat tax return. Our friendly team of IRS Enrolled Agents and expat accountants have specialized expat tax preparation experience to help expats around the world and walk you through what the next steps are – contact us today.

Streamlined Filing Procedure - Catching Up With US Returns

For many US citizens and Green Card Holders, once they move overseas they don't realize that they still need to file US tax returns.

There are other people living abroad and in the US that have foreign income and foreign accounts which have already been declared overseas and they didn't know they also had to be declared in the US.

If you do need to catch up with your US tax returns, or amend returns and declare foreign income and foreign bank accounts, the IRS has an amnesty - the streamlined filing compliance procedure.

1 - The two types of streamlined filing compliance

The streamlined procedures are available to both US individual taxpayers residing outside the United States and US individual taxpayers residing in the United States.

For individuals living outside the US - the Streamlined Foreign Offshore Procedures

If you are living in the US - the Streamlined Domestic Offshore Procedures

2 - Three parts to catching up or amending while living outside the US

If you are living outside the US and you need to catch up with your US tax returns or amend returns to include foreign bank accounts - you will be using the streamlined foreign offshore procedure.

There are 3 parts to be completed:

US tax returns
Disclosure document to explain why you have not been filing
Foreign bank account reporting

3 - US tax returns to be filed

The IRS asks that the last 3 overdue tax returns are filed. All returns before that which have not been filed will be waived.

On the US tax returns, you report worldwide income - even if that income has already been taxed and declared overseas.

foreign bank account reporting FBARs.jpg

A common mistake is people hear about the foreign earned income exclusion ($107,600 for 2020) and think if their foreign income is under this threshold that they do not need to file. This is not true - the filing thresholds are the same as if you are living in the US and to claim the foreign earned income exclusion you need to file the US tax return and still declare worldwide income.

If you need to file amended tax returns, you will just need to amend the last 3 tax returns.

4 - Disclosure document to explain why you need to catch up

The disclosure document (form 14653) explains the circumstances around why you have not been filing.

The most common reasons that people have are:

they spoke to a friend and then realized they needed to file
reading online and found out that they had to file
received a letter from their bank saying the bank needed to make a report as they were a US citizen and asking if they were up to date on reporting to the IRS

These scenarios are all fine and allowable - the IRS is looking for non-willful conduct. Non-willful conduct is broadly where there is an honest mistake, you didn't realize that you needed to file or you misunderstood the filing requirements.

streamlined foreign offshore procedure.png

5 - Foreign bank account reporting

As a US citizen, in addition to your US tax return you also have to make a separate report each year with your foreign bank accounts (FBAR or FinCEN 114).

If you have not been filing FBARs or are behind, you will need to file for the last 6 years. All delinquent FBARs before that are waived under the amnesty.

You will need to report (all outside the US):

bank accounts - including current accounts, savings accounts and Individual Savings Accounts (ISAs - cash and stocks and shares)
investment accounts
pensions

These are for:

accounts in your name
joint accounts
accounts where you are a signatory (e.g. business accounts, your children and if you have power of attorney)

For each account, you will need to report:

the highest (maximum) balance at any time in the year from January to December
the account number
the name on the account

You may also need to report your foreign accounts as part of your federal tax return using form 8938 - this will depend on your filing status and the maximum balance on the accounts for the year.

6 - Penalties

One of the main benefits of the streamlined filing procedure is the IRS waives all failure-to-file penalties, failure-to-pay penalties, accuracy-related penalties, information return penalties and FBAR penalties.

FBAR penalties alone start at $12,921 per account, per year.

7 - Taxes due

If all your income is from outside the US and from a country that has a higher rate of tax than the US, there should be no US federal income taxes due when you catch up.

If you do have income directly from the US - dividends, interest, capital gains, self-employed income, wages, property income - depending on the level of that income, there may be US tax.

If you have high income and you have dividends, interest, capital gains or property income, there is an additional tax, the Net Investment Income Tax (NIIT) that is charged on those sources of income at 3.8% above a certain threshold, depending on your filing status.

8 - Eligibility based on time in the US

To use the streamlined foreign offshore procedure, you need to have a minimum of 1 year out of the last 3 tax years (2017, 2018 and 2019 - January to December) where you spent less than 35 days in the US.

9 - What about the Offshore Voluntary Disclosure Program?

You may have read about the Offshore Voluntary Disclosure Program (OVDP) as an alternative way to catch up.

That program also provided a way for US citizens to catch up with their taxes, but that program is now closed and there are no plans to currently bring it back.

10 - Filing all the documents

There is no specific due date to file all the documents - the IRS just asks for to catch up as quickly as possible once you are aware you need to file.

The 3 tax returns and disclosure document are filed by paper and go to an IRS office that purely deals with streamlined foreign offshore disclosures - the documents are normally processed in 4 to 8 weeks.

The 6 years of FBARs are filed online and confirmation is received in a few minutes.

Summary

After you do catch up, each year you will need to file a US tax return and the FBAR (if the total of all your foreign accounts, including pensions, are $10,000 or more).

The filing deadline for the US return is June 15 when you are living overseas (extended to July 15 for 2020).

The FBAR is due by April 15, although there is an automatic extension to October 15 if you miss the first deadline.

If you have any questions on filing your US tax return as an expatriate, the foreign financial account reporting, or catching up with your US tax returns - feel free to contact us here.

Actors’ Tax Guide for 2020 Tax Season

GET ACTORS INCOME SPREADSHEET

GET ACTORS EXPENSES SPREADSHEET

As an actor, taxes may be the last thing you want to think about – just leave it alone and it will all go away!

As the tax deadline gets closer, it can become a source of stress and there is always a lot to think about with tax (there are literally tens of thousands of pages of the tax code) – below we’ve made it simple and you have a good place to start your return.

Income for Actors

Professional actors are often employees, especially under Equity contracts and you will receive a W-2, normally with federal, state and local taxes deducted at source.

For self-employed work you will normally receive a 1099-MISC – you may receive many throughout the year, you just keep them safe and then they are ready once you make a start on the return.

If you have any other income, where you didn’t receive a W-2 or 1099-MISC, that will still need to be reported on the return. Even if someone swapped services with you or gave you some free products, the market value will need to be included as income.

If you did a job and you don’t have a 1099-MISC, it’s fine to go back and ask them if they have a copy for you.

Deductions for Actors

Everything changed from 2018 (more details below), so these expenses are just for your self-employed income. If you have expenses for your W-2 income, you will need to keep a separate record for those.

Actors are in the lucky position that you can claim for many items that most people can’t. Always, you just need to make sure that the expenses are directly related to your work and that they are “ordinary and necessary” (not super expensive and extravagant). Having said that, what is ordinary and necessary will often depend on your income and what level you are at – if you are famous you may need to pay extra for privacy, which may be seen as extravagant, but in reality is necessary for you to work.

Agent and manager fees – all the fees you pay to your agent and manager

Hair and make-up – when you incur the cost for a specific job or audition

Wardrobe – the general rule is that it’s clothing purely for the role and there will be no personal use

Travel – you are allowed to claim all costs of overnight travel (flights, Uber, trains, buses/coaches, hotels, Airbnb, tips, dry-cleaning and laundry). For local travel, you can include trips to casting, auditions, performances, acting classes and other direct business appointments

Meals – for overnight trips, fine to claim for meals. You can also claim if you meet your agent, business manager, other cast members or for any other direct business matter – for meals, you always claim 50% in the tax return. If you are on the road, the IRS does have a per diem meal allowance that can be useful if you are not great at keeping receipts/records

Vehicle expenses – you can either claim for mileage, where you keep a record of the distances for work, or you can claim actual costs of using the vehicle and you will need to have records of the cost of the vehicle, gas, repairs and insurance

Research – actors need to keep up with the industry and you can claim for film and play tickets, Netflix, HBO, Apple TV and other streaming services

Subscriptions – union dues, magazines, journals, online sites such as Backstage.com

Legal and professional fees – attorneys, accountants and other professionals

Equipment – this covers any physical item that has a life of more than one year, normally a laptop, iPad, phone, video and sound equipment

Use of home – the main rule is that you must have a room (or rooms) that you use exclusively for work, if there is mixed use then you can’t claim the room. You can claim mortgage interest, rent, gas, water, electricity, real estate taxes, insurance and repairs. To calculate the percentage of those costs to claim, you look at the square foot of the work area and compare that to the total square foot of the property.

Changes to claiming actor expenses for tax

The main change for actors for last year (2018 return) and now when you prepare your 2019 tax return, is that if you received a W-2 for acting work, you won’t be allowed to claim your work expenses for that work.

There is an exemption if your total income for the year (employed, self-employed and any other income) is $16,000 or less. You will also need to be able to show that:

- You worked as a performer for at least two employers in the year

- Received at least $200 in wages from each of the two employers

- Had expenses of 10% or more of your income as a performer

If you can meet the criteria, you can claim the Qualifying Performing Artist Deduction and claim all your acting expenses.

If you have self-employed income as an actor (1099-MISC), you will still be able to claim your work expenses. If you have a mix of W-2s and 1099s, then we suggest keeping the expenses separate and you can then clearly show what is allowable.

Possible relief in 2020

In June 2019, a bill was placed before Congress for the problem to be corrected and enable actors to claim expenses for their employed income. The Performing Artist Tax Parity Act would allow single actors earning up to $100,000 and married filing jointly actors earning up to $200,000 to claim expenses and reduce the additional taxes.

That bill is still in progress and actors unions SAG-AFTRA and The Actors’ Equity Association are treating it as a top priority for 2020.

If it is something you want to show support for, you can contact your US Representative in Congress.

Tips

If you are receiving your acting income via a W-2, you could consider setting up a “loan out” corporation. This simple step will allow you to continue claiming all your work expenses for your acting work and claim tax deductions.

Any questions

We are very happy to help with any questions and we can run through how to file your actor tax return. Our friendly team of IRS Enrolled Agents have specialized actor tax preparation experience to help actors in New York, California and across the US and walk you through what the next steps are – contact us today.

US Expat Tax Guide to Tax Season

After you leave the United States, whether you have US citizenship or you are a Green Card holder, you will need to keep filing US tax returns each year. Below is a guide to completing your expat tax return as an American citizen abroad.

1 - Do you need to file?

For the 2021 tax season (January 1, 2020 to December 31, 2020) you will need to file if your worldwide income is at least the amount shown below. If you have self-employed income (freelance income), the filing threshold is much lower, $400 in profits.

Single under age 65 $12,400

Single age 65 or older $14,050

Married filing jointly, both spouses under 65 $24,800

Married filing jointly, one spouse age 65 or older $26,100

Married filing jointly, both spouses 65 or older $27,400

Married filing separately, any age $5

Head of household under age 65 $18,650

Head of household age 65 or older $20,300

Qualifying widow(er) under age 65 $24,800

Qualifying widow(er) age 65 or older $26,100

2 - Worldwide income

You will need to report worldwide income on your US tax return (form 1040). This includes income even if it has been taxed in your home country.

A common misconception is that if your income is under the foreign earned income exclusion then you don't need to file. That is not true - you can use the foreign exclusion to stop the US tax, but you still need to file the return to claim the exclusion.

Also, be careful with income that is tax free in your home country - it may be that the US does not recognize the tax free status and you will still need to declare that on the US tax return.

3 - Foreign Tax Credit

If you had income from outside the US and paid tax on that same income, when you complete your US tax return, you can claim a foreign tax credit against any US tax on that foreign income.

The foreign income and tax paid are disclosed on form 1116 - you can then use that form to credit foreign taxes up to the US tax on the same income.

If the foreign tax is more than the US tax, the credit will be restricted - the US will not give you a refund of foreign tax.
If the foreign tax is less than the US tax, you will pay the additional tax, a top up

You need to be a little bit careful with state tax returns - each state has different rules for foreign tax credits. If you are filing a state tax return and you need to report foreign income on that return, you will just need to check the state rules for claiming foreign tax credits.

4 - Foreign Earned Income Exclusion

If you have foreign earned income and your tax home is outside the US, you may be able to claim the foreign earned income exclusion (FEIE).

Foreign earned income includes - salary, wages, bonus, self employed income, commissions

It does not include - dividends, interest, capital gains, gambling winnings, alimony and pensions (normally rental income unless you can show you provide services as part of renting out your property - even then, only a portion can be used for the exclusion)

For the 2021 tax season, the foreign earned income exclusion is a maximum of $107,600. If you have any excess left over, it does not carry forward to the next year.

Note - if you claim the foreign earned income exclusion, you can't claim the additional child tax credit mentioned below.

5 - Foreign Housing Exclusion and Deduction

You can claim the foreign housing exclusion or foreign housing deduction in addition to the foreign earned income exclusion.

Foreign housing exclusion - you can claim this with employed income
Foreign housing deduction - you can claim this with self-employed income

Note - if you claim the foreign housing exclusion or deduction, you can't claim the additional child tax credit mentioned below.

6 - Catching Up With US Returns

As an American citizen paying taxes abroad, you may be behind in filing US tax returns - or you may have just found out that you still need to file a tax return while you are outside the US.

If you do need to file, the IRS has an amnesty, the streamlined filing compliance procedures. If you are living outside the US, the streamlined program you will use is the streamlined foreign offshore procedures.

The streamlined filing process has 3 parts: (1) the last 3 overdue tax returns, (2) a disclosure document (form 14653) to explain why you have not been filing - not knowing you needed to file is a valid excuse (the IRS call this non-willful conduct), (3) 6 years of FBARs

7 - State Tax Returns

Once you are overseas, the main reason you will still file state returns is for income that comes from that state - the main example would be a rental property.

There are some states, California for example, that do keep a close hold on you and may require you to keep filing state returns for a number of years after you leave.

8 - Filing Deadlines

When you are living in the US, the filing deadline is May 17, 2021.

As an expat overseas, your filing due date is June 15, 2021 - if you do owe any tax, we suggest paying this by April 15, 2021 to stop any interest being charged.

If you have a refund of US tax, you can have a bank transfer, but the IRS will need a US bank account in your name. Otherwise, the IRS will send out a paper check to your current home address (worldwide).

9 - Foreign Bank Account Report

In addition to the US tax return (form 1040), as a US citizen you also need to make a separate report each year for all your foreign financial accounts.

The foreign bank and financial form (FBAR, also called FinCEN 114) has 3 parts: (1) accounts in your name, (2) joint accounts, (3) accounts where you are a signatory - e.g. business accounts, your children's accounts, accounts where you have power of attorney

Bank and financial accounts include current accounts, savings accounts, investments, bonds and pensions.

The FBAR is filed online using the BSA E Filing system and there is a response within 5 minutes of the FBAR being filed to confirm it has been accepted.

The threshold to file the FBAR is $10,000 - you find the highest balance on each financial account at any time during the tax year, add up all the highest balances for your accounts and if they are $10,000 or more then you need to file for all your accounts (the $10,000 threshold is for all your accounts in total, not per account).

10 - Claiming Children - Additional Child Tax Credit

If you claim your child as a dependent on your tax return, you may be able to claim a tax credit or a tax refund.

Conditions to claim the credit:

Your child is 16 or younger on 31 December 2019
They are a US citizen or resident alien and they have a social security number
They lived with you for at least half the tax year

Your earned income needs to be a minimum of $2,500 and a maximum gross income of $200,000 (at which point it starts to decrease )

The tax credit is a maximum of $2,000 per child - if you have no tax, the tax refund is a maximum of $1,400 per child, per year.

11 - FATCA reporting - Form 8938

While you file an FBAR, there is a similar form in the tax return itself. Form 8938 covers the value of your financial assets - the threshold to file is higher than the FBAR, and there are a few more details to disclose.

12 - Ownership of a foreign company - Form 5471

If you own 10% or more of the shares of a company outside of the US, you will need to report that company back to the IRS each year as part of your tax return.

Form 5471 covers Americans who meet the 10% share ownership and also US citizens who are directors or officers of a company outside the US.

When filing form 5471, there are various categories which dictate how much information needs to be submitted - this can be a complicated form and you may need assistance to complete the disclosure.

13 - PFIC Reporting

If you invest in a product (e.g. a fund) based outside of the US that produces mainly passive income (interest, dividends, capital gains etc) then you may need to file form 8621 to report that investment (commonly called PFIC reporting).

In the UK, the most common investments that require PFIC reporting are ISAs and fund investments. There are other types of investments and we recommend a thorough review to check if you do need to report.

Like form 5471, this is a complex form and you may need assistance to complete the disclosure.

14 - Gifts

As a US citizen, if you received gifts during the calendar year you may need to report those as part of your tax return.

Form 3520 covers gifts received from sources outside the US, the thresholds to file the form are:

Gifts from foreign individuals or estate - $100,000

Gifts from a foreign company or partnership - $16,388

Form 3520 is filed as part of your main tax return (form 1040)

If you gave gifts, as a US citizen you may need to file form 709. The conditions to file a gift tax return are:

You made gifts of more than $15,000 to someone (apart from your spouse)
If your spouse is not a US citizen, the threshold is $155,000

Form 709 is filed separately from your main tax return, the due date is May 17, 2021

15 - Pensions

Pensions will be included on your US tax return as worldwide income. If your current country has a tax treaty with the US, you may be able to use that to stop any US tax on pensions.

If you do use the tax treaty, you will need to file form 8833 to explain what part of the treaty you are using and how that impacts your US taxes as an expat.

Even while you are abroad, if you withdraw funds from your US pension early, there could still be an early withdrawal tax penalty of 10%.

16 - Net Investment Income Tax

Although claiming the foreign earned income exclusion and foreign tax credits may stop all federal income tax, it is possible there will be an additional tax to pay.

Net investment income tax (NIIT) was introduced as a way to pay for healthcare in the US. The NIIT law came in after most tax treaties were signed and so you can not offset foreign tax credits against the NIIT.

Net investment income tax is just applied to investment income - interest, dividends, capital gains, rental and royalty income.

If your total income is above the thresholds below, your investment income is deemed to be taxed last and so any amount above the threshold has 3.8% net investment income tax

Single - $200,000

Married filing jointly - $250,000

Married filing separately - $125,000

Head of household - $200,000

Qualifying widow(er) with dependent child - £250,000

17 - Sale of Primary Residence

As a last point, if you do own a home outside of the US, you should always keep an eye on how much gain/profit you have in the property.

Many countries exempt your main home from tax completely when you sell the property. As a US citizen, you need to report the sale of your main home as part of your US tax return.

The US will only provide a tax exemption of a maximum $250,000 for any gain you make on the property. Any gain above that will be taxed in the US - the rate depends on your total income for the year, the highest tax rate on the gain would be 20%.

Summary

Hopefully this guide will help as you make a start on your US tax return. The IRS also has a comprehensive guide for US citizens abroad - publication 54.

We are very happy to help with any questions and we can run through how to file your US expat tax return. Our friendly team of IRS Enrolled Agents have specialized expat tax preparation experience to help expats around the world and walk you through what the next steps are – contact us today.

Foreign Bank Account Reporting For US Citizens

Whether you are living in the United States, or you are a US expat, if you have foreign bank and financial accounts you may need to report these to the IRS each calendar year.

Both the FBAR and Form 8938 discussed below are part of the Foreign Account Tax Compliance Act (FATCA). In addition to you making reports, any financial institutions in foreign countries where assets are held will also be making reports back to the US about the account holder and who has an interest in or signature over the account.

Foreign Bank Account Report (FBAR)

In addition to filing your US tax return each year, a separate report of foreign bank and financial accounts held is made to the US Treasury.

The foreign bank account report (FBAR, or FinCEN form 114) is filed online using the BSA E Filing System.

For each financial account that you hold, you check the highest balance on that account. You then add up the total highest balances and if they are $10,000 at any time or more then you need to file the FBAR.

The financial accounts include bank accounts, savings accounts, investments, pensions in your name, in joint names and where you are a signatory.

The FBAR (FinCEN 114) is due by April 15, 2020. If you don't meet this deadline, then you receive an automatic extension to October 15, 2020.

If you do file the FBARs late, the penalties can be extreme - those currently start at $12,921.

Form 8938 in your US tax return

As part of your US income tax return, you may also need to report any financial interest in a foreign account. The thresholds for form 8938 are higher than the FBAR, please see below:

If you are living in the US

Single - more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year
Married filing jointly - more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year
Married filing separately - more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year

If you are living outside the US

Single - more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year
Married filing jointly - more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year
Married filing separately - more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year

The due date for form 8938 is the same as the tax return (you file the form as part of your 1040) - April 15, 2020 if you are living in the US, June 15, 2020 if you are an American overseas.

Again, like the FBAR, penalties for not filing form 8938 are severe. Failing to file is $10,000 and this increases by $10,000 for every 30 days after the deadline (to a maximum penalty of $50,000).

Summary

Hopefully this guide will help you to report your foreign bank accounts both on the FBAR and form 8938 if required.

We are very happy to help with any questions and we can run through how to file your FBAR, form 8938 and US tax return. Our friendly team of IRS Enrolled Agents have specialized expat tax preparation experience to help expats around the world and walk you through what the next steps are – contact us today.

How To Claim Help From The Coronavirus Self-Employment Income Support Scheme

Details of support for freelancers and contractors have been issued by the Government.

Chancellor Rishi Sunak, has announced an emergency support package to protect Britain’s 5 million self-employed workers.

You can use this scheme if you're self-employed or a member of a partnership and have lost income due to coronavirus.

How much will you receive?

The maximum payment is £2,500 per person, per month.

The government will provide up to 80% of your self-employed earnings (up to the maximum £2,500 per month).

How do I qualify?

The government will review the self-employed income on your last 3 tax returns. If you haven't been self-employed for 3 years, you can still claim as long as you filed as self-employed for 2018-19.
To be eligible, you must have annual profits (self-employed income less expenses) of less than £50,000 a year on average over the last 3 years, according to HMRC.
That you have lost income due to the coronavirus.
Are still self-employed and will continue to be into the 2020-21 tax year
(6 April 2020 to 5 April 2021).
More than half your income comes from being self-employed.

How do I apply?

HMRC have advised you should not contact them now.
The government will use existing information to check potential eligibility and invite applications once the scheme is operational.
The grant will paid directly to your bank account - they anticipate this will start in June 2020, with 3 months being paid as a lump sum and then monthly amounts.
If you have not submitted your 2018-19 tax return, you now have 4 weeks to file your return and become eligible for this scheme.

Will these grants be repayable?

The chancellor has confirmed that the grants will be fully taxable and so you will need to include these as income on your 2020-21 tax return as income.
Based on 3 months grant being paid in June 2020, at £2,500 per month, the total taxable income would be £7,500.
The income tax on that as a basic rate taxpayer would be £1,500 and National Insurance of £675 - total tax of £2,175 - plus there will be student loans to pay if you are in repayment - these will all be due by 31 January 2022.
The government has been trying to tax self-employed individuals at the same rate of National Insurance as employees for years now and as part of his speech the chancellor hinted that he would be looking to create parity - it may be that NI rates for self-employed are raised from 9% to 13% as a method to help fund these grants.
It may also be that the grants are repayable if your self-employed profits for 2020-21 are more than £50,000 or more than your average for the last 3 years - the government has yet to provide guidance on that

I run my own company as self-employed

HMRC have confirmed you will not be eligible for the self-employed coronavirus help if you run your self-employed income through a company and take salary and dividends.

In that case you will need to apply for the coronavirus job retention scheme.

How long will the grants be paid for?

The chancellor has guaranteed 3 months until June 2020. The government will then review the scheme in light of the impact of the pandemic and decide if an extension is necessary.

Support available now

1 - Deferral of Self-Assessment payment

The Self-Assessment payment on account, that is due to be paid to HMRC by 31 July 2020 can now be deferred until 31 January 2021

This is automatic, you don't need to apply. No penalties or interest will be added as long as the payment is made by January 2021.

2 - Claiming Universal Credit

The levels have been increased to £94.25 per week - you can check eligibility here

You can claim both the grant and Universal Credit

Check Eligibility

3 - Deferral of VAT payments

All VAT registered businesses are eligible and the VAT payments are deferred for the next 3 months.

4 - Business Interruption Loan Scheme

Loan scheme for small businesses with funding of up to £5 million.

The Government will also cover the first 12 months of interest payments and any fees, so there are no upfront fees and lower monthly repayments.

Summary

The first step is to check your profits for the last 3 years to see if you qualify for the grant - are they under £50,000 on average per year?

Use the Universal Credit eligibility button above to see if you can have any immediate financial support.

If you haven't filed your 2018-19 tax return, file now if you are eligible for the grant.

These measures cover the next 3 months and it is likely that further measures will be provided. In that case, if your 2019-20 income is under £50,000, file your 2019-20 tax return early to make sure you are eligible to claim the next round of grants.

Coronavirus Relief If You Are Employed In The UK

For many people coronavirus has had a huge financial impact and this guide helps to explain the reliefs available while we deal with the pandemic.

1 - Coronavirus Job Retention Scheme

The aim of the scheme is to allow employers to keep their employees during this difficult time with financial support from the government.

If your employer is unable to operate, or there is no work for you (known as being on furlough) - both you and your employer can agree that you will be treated as a furloughed employee. In this case, furloughed workers will receive 80% of your normal wages up to £2,500 per month.

The funds will come from your employer and taxes will still be deducted - the payments are treated as income.

The Coronavirus Job Retention Scheme will cover the cost of your salary backdated to March 1st and covers March, April and May 2020, but will be extended if required.

Your employer can pay you more than the grant, but they do not have to unless there is a provision in your contract.

2 - Deferral of Self-Assessment Payment

If you file a tax return, and you are due to make a self-assessment payment on account in July 2020, that payment is now deferred to 31 January 2021.

The deferral is automatic - you do not need to make a claim and there is no interest or penalties by paying up to January 2021.

3 - Time to Pay Tax Due

If you have any tax due to HMRC, you can contact HMRC and use their Time to Pay service.

If you owe under £10,000 you may be able to arrange a payment plan online.

You can use the webchat service by clicking here.

Alternatively you can contact HMRC's Covid-19 helpline - 0800 024 1222 (open Monday to Friday, 8am to 4pm)

4 - Help With Mortgages

In March 2020, all UK banks agreed to offer a 3 month payment holiday if you have been experiencing financial difficultly due to coronavirus.

The mortgage payment holidays do need to be applied for and interest will still be applied to the mortgage during the holiday period.

Payment holidays will also be available to buy-to-let landlords, where tenants have lost income because of Covid-19. The government has made it clear that landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.

5 - Protection for Renters

From March 2020, landlords are required to provide 3 months notice to all renters (in private rented and social housing) if they intend to take back possession of the property.

The landlord can not start legal proceedings until after this 3 month period has elapsed and the government may extend this period if needed.

If you have an ongoing housing possession action, that should now be suspended by the courts.

Renters are still liable for the rent during this period - if you are unable then the government asks that you show that you have made attempts to agree a payment plan with your landlord.

During this period landlords must ensure properties are kept at the required standard and all essential repairs are made.

6 - Loans and Credit Cards

Many lenders will provide assistance during the pandemic through loans and credit cards payment holidays.

Each lender offers different help and you should contact your bank to check what is available.

Help includes waiving missed payment fees, offering reduced payments, payment holidays and emergency credit limit increases.

7 - Helping With Overdrafts

Each provider will offer different help with overdraft interest and payments.

If you do need financial help, you can contact the bank and see if they offer interest holidays, a reduction in the interest or temporary extension of the overdraft to help during this period.

8 - Council Tax Payment Holiday

Many councils are now offering payment holidays for your council tax.

If taking a payment holiday would assist in your current situation, if you contact your council and see what they are offering.

The council tax will still need to be paid, the holiday will just defer the payments - so those payments are likely to be larger once they resume.

9 - Utilities and Other Household Bills

With energy and water bills - the companies are working with the government to ensure that services remain working.

Disconnections of standard meters are not allowed during the pandemic and the suppliers will work with you on payment plans and evening pausing payments if required.

If you do need help to cover your household bills, if you contact the supplier and they have been instructed by the government that they need to work with you to find a solution.

10 - Universal Credit

If you have been impacted financially by Covid-19, you can check if you are eligible for Universal Credit from the government.

You can make a claim online, there is no need to attend a claim centre.

11 - Sick Pay

If you can't work because you have symptoms of coronavirus, or you are caring for someone with coronavirus, you can claim statutory sick pay - it's paid by your employer for up to 28 weeks.

To check your entitlement, you can check your employment contract, contact your employer and find more details from the government here.

Summary

These measures cover the next 3 months and it is likely that further measures will be provided. The government has a dedicated page for support for those affected by coronavirus here.

Coronavirus Relief For Employees In The US

The whole country has been impacted by coronavirus - while we focus on our families and loved ones, the economy has taken a huge hit and many employees are in financial difficulty.

This guide offers details of the coronavirus reliefs available to full and part time employees.

1 - Stimulus Checks

The Senate passed the coronavirus stimulus package, the CARES Act, signed into law on March 27. The act will send $1,200 repayments and checks to eligible individuals and $500 for each child under the age of 17.

To be eligible, if you are single your adjusted gross income (line 8b of the 2019 1040 federal tax return) should be $75,000 or less. If you are married filing jointly the threshold is $150,000.

If your income exceeds the thresholds above, the repayment will be reduced by $5 for every $100 of income over the threshold.

Treasury Secretary Mnuchin has said that repayments will start to be issued in April. If you will receive a paper check, then the time scale may be up to 8 weeks.

This is a one off payment, it's not a monthly recurring payment - but given the current situation, it is likely that the government will announce further reliefs in the coming months.

Even if you owe past taxes, the repayment will still be issued to you.

The stimulus payments are not taxable and they will not be reclaimed if you are over the income threshold in the future.

Further details of the individual and married filing thresholds can be found here.

2 - Income Tax Deferments

The due date for 2019 tax payments has been extended from April 15, 2020 to July 15, 2020.

You can defer up to $1 million of federal income tax (including self-employment tax) by 90 days with no interest and no penalties.

If you believe you will have a refund, it still makes sense to file as soon as possible so you have the funds now.

The deferral is automatic, you do not need to make a claim.

Each state has its own reliefs and you can view the current guidance for each state here.

3 - Filing Deadline

The new deadline for filing federal returns is July 15, 2020

Each state has different views on extensions and you can view the current guidance for each state here.

4 - Unemployment Insurance

Employees who have been laid off because of coronavirus are eligible to claim unemployment benefits.

As part of the coronavirus relief package, an additional $1 billion has been set aside for unemployment benefits.

The CARES Act also provides an additional $600 per week for 4 months to eligible workers.

5 - New Paid Leave Law

The Families First Coronavirus Response Act (FFCRA) provides that employees are paid leave for specified reasons related to coronavirus.

Two weeks of paid leave at regular pay if the employee is quarantined or experiencing symptoms of Covid-19
Two weeks of paid leave at two thirds regular pay if the employee is caring for someone with coronavirus or caring for a child where the school or childcare facility has closed due to coronavirus
If you have been employed for at least 30 days, up to 10 additional weeks of paid leave at two thirds regular pay if the employee is caring for someone with coronavirus or caring for a child where the school or childcare facility has closed due to coronavirus

6 - Student Loans - Pausing and Interest

All federally held student loans will automatically have their interest rates set at 0% for a period of 60 days from March 13, 2020.

In addition, if you make a request, you can suspend all loan repayments for 2 months during the pandemic. There will be no interest or penalties by suspending the loan repayments.

The US Department of Education will continue to review the coronavirus situation to see if the measures need to be extended.

7 - Homeowners

If your mortgage is owned by Fannie Mae or Freddie Mac, you can delay payments for up to 12 months.

Interest will still apply to the balance of the mortgage outstanding, but there will be no late fees or affect on your credit score for delaying the payments.

Foreclosure and other legal proceedings for eviction are suspended - including any foreclosures and legal actions in process.

If your mortgage is held with other providers, you may still be able to defer payments by 3 to 12 months depending on the company.

8 - Renters

If landlords have mortgages with Fannie May or Freddie Mac, they will not be allowed to evict tenants during the crisis, through to the end of July 2020.

Landlords can not charge any fees or penalties for non-payment of rent during the pandemic.

Each state has it's own guidance for renters where the landlord does not have the mortgage with Fanny May or Freddie Mac - further details here.

9 - Household Bills

For internet and phone accounts, AT&T, Comcast, Cox, RCN, Sprint, T-Mobile and Verizon have all agreed they will not cut-off services during the crisis.

For electricity, gas and water - each company has its own policy, but the government has told them they need to work with consumers. For example, in New York, Con Edison has agreed to suspend all shutoffs for electricity and gas.

If you are experiencing financial difficulty, the first step is to contact the company and ask what reliefs they have in place.

SUMMARY

These measures cover the next 3 months and it is likely that further measures will be provided. The IRS has a dedicated page for support for those affected by coronavirus here.

Self-Employed Reliefs For Coronavirus In The US

For the majority of the 57 million self-employed individuals, there is extreme financial pressure as income has decreased or stopped completely.

This guide offers details of the coronavirus reliefs available to self-employed people to help get through the crisis.

1 - Stimulus Checks

The Senate passed the coronavirus stimulus package, the CARES Act, signed into law on March 27. The act will send $1,200 repayments and checks to eligible individuals and $500 for each child under the age of 17.

To be eligible, if you are single your adjusted gross income (line 8b of the 2019 1040 federal tax return) should be $75,000 or less. If you are married filing jointly the threshold is $150,000.

When you look at the thresholds above - you include your self-employed net earnings (income less expenses). So even if your income is above the threshold, once you claim expenses you may fall below.

If your total income (self-employed net earnings plus all other income) exceeds the thresholds above, the repayment will be reduced by $5 for every $100 of income over the threshold.

Treasury Secretary Mnuchin has said that repayments will start to be issued in 3 weeks. If you will receive a paper check, then the time scale may be up to 8 weeks.

This is a one off payment, it's not a monthly recurring payment - but given the current situation, it is likely that the government will announce further reliefs in the coming months.

Even if you owe past taxes, the repayment will still be issued to you.

The stimulus payments are not taxable and they will not be reclaimed if you are over the income threshold in the future.

Further details of the individual and married filing thresholds can be found here.

2 - Income Tax Deferments

The due date for 2019 tax payments has been extended from April 15, 2020 to July 15, 2020.

You can defer up to $1 million of federal income tax (including self-employment tax) by 90 days with no interest and no penalties.

If you believe you will have a refund, it still makes sense to file as soon as possible so you have the funds now.

The deferral is automatic, you do not need to make a claim.

Each state has its own reliefs and you can view the current guidance for each state here.

3 - Filing Deadline

The new deadline for filing federal returns is July 15, 2020

Each state has different views on extensions and you can view the current guidance for each state here.

4 - Unemployment Insurance

Under changes introduced to help with coronavirus, self-employed people are now eligible to claim unemployment benefits.

As part of the coronavirus relief package, an additional $1 billion has been set aside for unemployment benefits.

The CARES Act also provides an additional $600 per week for 4 months.

5 - Small Business Loans

The CARES Act includes $349 million in loan funding from the Small Business Administration (SBA).

SBA will issue funding as Economic Injury Disaster Loans up to $2 million
Low interest rates of 3.75%
Long-term repayment plans of up to 30 years

6 - Student Loans - Pausing and Interest

All federally held student loans will automatically have their interest rates set at 0% for a period of 60 days from March 13, 2020.

In addition, if you make a request, you can suspend all loan repayments for 2 months during the pandemic. There will be no interest or penalties by suspending the loan repayments.

The US Department of Education will continue to review the coronavirus situation to see if the measures need to be extended.

7 - Homeowners

If your mortgage is owned by Fannie Mae or Freddie Mac, you can delay payments for up to 12 months.

Interest will still apply to the balance of the mortgage outstanding, but there will be no late fees or affect on your credit score for delaying the payments.

Foreclosure and other legal proceedings for eviction are suspended - including any foreclosures and legal actions in process.

If your mortgage is held with other providers, you may still be able to defer payments by 3 to 12 months depending on the company.

8 - Renters

If landlords have mortgages with Fannie May or Freddie Mac, they will not be allowed to evict tenants during the crisis, through to the end of July 2020.

Landlords can not charge any fees or penalties for non-payment of rent during the pandemic.

Each state has it's own guidance for renters where the landlord does not have the mortgage with Fanny May or Freddie Mac - further details here.

9 - Household Bills

For internet and phone accounts, AT&T, Comcast, Cox, RCN, Sprint, T-Mobile and Verizon have all agreed they will not cut-off services during the crisis.

For electricity, gas and water - each company has its own policy, but the government has told them they need to work with consumers. For example, in New York, Con Edison has agreed to suspend all shutoffs for electricity and gas.

If you are experiencing financial difficulty, the first step is to contact the company and ask what reliefs they have in place.

SUMMARY

These measures cover the next 3 months and it is likely that further measures will be provided. The IRS has a dedicated page for support for those affected by coronavirus here.